Question Details

Klijijh, Home Buyer in bgujg

why fees are bigger when rates are lower?

Asked by Klijijh, bgujg Tue Jan 22, 2008

Help the community by answering this question:


What fees are you speaking of? Loan fees and cost can vary depending if you are going for a no point loan or a loan with points.
0 votes Thank Flag Link Wed Jan 30, 2008
Pam Winterba…, Real Estate Pro in ,
If you are talking about points on a loan it is because lenders have a certain "rate" they need to meet to sell loans.. that rate is called the APR or in layman terms the total rate. In order to meet the rate demanded by investors the difference may be made up by using points.

This is really a simplistic answer.. but OK for illustrative purposes...If you are looking at a loan rate of 6% but the investor wants to see an overall rate of 7% then there is typically 1 point origination fee. By adding the one point to the existing rate the lender receives the rate of return they are looking for.
0 votes Thank Flag Link Tue Jan 22, 2008
Kaye Thomas, Real Estate Pro in Manhattan Beach, CA
What fees are you referring to? Lender fees?
Web Reference:
0 votes Thank Flag Link Tue Jan 22, 2008
The Hagley G…, Real Estate Pro in Pleasanton, CA
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